Net profit was Rs3,870 crore ($567.91 million) for the three months to Dec. 31, compared with Rs3,357 crore reported a year ago, said HDFC Bank, India’s most valuable bank.

Analysts on average had expected a net profit of Rs3,788 crore, according to data compiled by Thomson Reuters.

Gross bad loans as a percentage of total loans were 1.05 percent in the December quarter, versus 1.02 percent in the September quarter.

HDFC Bank has far lower bad loans than its bigger rivals, thanks to its stronger retail business and smaller exposure to project finance.

India’s banking industry has been hit by the government’s shock cancellation in November of 86 percent of its currency in circulation, which forced many institutions to scramble to replace the high-value banknotes.

The banking sector also continues to battle record sour assets with the regulator setting a March deadline for a clean up.

Despite the banknote ban hitting credit demand in many sectors, HDFC Bank said its domestic advances as of end-December grew about 17.5 percent from a year earlier.

That helped net interest income for the quarter grow 18 percent to Rs8,309 crore, HDFC Bank said. Net interest margin for the quarter was 4.1 percent.

Shares in HDFC Bank, which has a market capitalisation of about $47 billion, were flat after the results in a Mumbai market that was up 0.4 percent.